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Yes, I am. I am leading these [offshore outsourcing] decisions. We do things in a collegiate fashion here. We manage by consensus, but ultimately the business side looks to me as the IT expert. Did you get any push from management about your decisions to go offshore?
No. Their take on it was that there's no difference between a programmer sitting in New Delhi or one sitting in San Jose. The reality is that most vendors are not going to sit in a desk right next to your office. So management was very open-minded about this decision. What were the drivers/main reasons for going offshore?
The Indian vendors were willing to add things in that were not originally in the scope of work. They knew it would make a better system. We found this partnership way of doing business with us very impressive. In contrast, one of the big U.S. vendors we interviewed made us feel very nickeled and dimed. They kept telling us, "this wasn't addressed in our scope of work."
So ultimately [offshore outsourcing] was an easy sell because it's cheaper. But what's really amazing is the kind of people we were getting. They were so incredibly good. They didn't have the domain expertise, but they knew SQL server inside out and had a great work ethic. And because I was so hands-on during the process and knew the domain, I could direct them and, ultimately, shape the solution to best fit the needs of a real estate company, something they could not always do without the domain.What countries are you outsourcing to and why?
India is the only one. We chose India because the quality of work is high -- they are proven leaders in this area -- and the costs are low. In addition, the Indian firms have a very good U.S. presence. We currently have a maintenance agreement with one Indian firm servicing us from a U.S. location, which is very reassuring. My account manager was based in San Francisco and was accessible throughout the project.
Our offshore outsourcing agreement is branded as an Indian thing. But it's really not about India; it's about a global company with 43 offices in the U.S. The bulk of the work was actually done in India. But it's reassuring to have a state-side presence as well. I knew that in the event of a war or natural disaster, they could move the project outside of India.Did you include a contingency plan to address war or other situations in your contract?
Yes, we did. It states that if there are any acts of God or war, they will move the work to a suitable location at the same price. We won't pay more even it's a higher cost center. They were fine with that. What do you find is the biggest obstacle to sending work offshore? Any surprises that IT executives new to the offshoring trend should be aware of?
To address these communications issues, I would recommend asking the project leader (PL) and group leader (GL) -- who are responsible for product delivery from the Indian side -- for status reports in writing. These reports can document any schedule slippage. By making them put it in writing, it forces them to constantly be in line with the original scope of work. The way it works is that you have an account manager in the U.S., then a GL in India who manages several projects and allocates resources. The GL hires a PL from within their firm, and the PL is responsible for managing the programming team. You need to escalate issues to the GL when necessary and take advantage of the GL's oversight on your project. This was the way it worked with us and Tata Consulting Services.
Click here to read part two of the interview.